RGT Pepper Market Report Week 23/ 2021

 

 Royal Golden Weekly Pepper Market Updates

 

Vietnam: To buy or not to buy?
That is the question nowadays as we finished off week 22 in a firm stable trend averaging at 71 dong for raw materials. Speculation is still at driver’s seat with an expectation of a higher price going forward taking note that despite a lack of support from sellers, raw materials remain strong on its standing with its back up support from locals and FDI keeping pepper at its pedestal.

What seems fascinating is that despite market clearly leaning towards a secure standing, suppliers are reluctant to partake at a current level. China and locals on the other hand continue to be an aggressive buyer triggering a possibility of an early outpace in inventory supply just almost halfway through of the year.

Wrapping up the week, locals remain active while shippers were seen idle in buying raw material but active in terms of selling.
Opening week today raw is at 71 dong firming up at 72 halfway through the day having a good demand from almost all major importers like USA, Europe, and Asia with a notable comeback of Nepal since last week owing to its government decision to finally rolled back its quota permits for pepper imports implemented early last year.

Farmers starting week are visibly slow in selling knowing that they are sufficiently covered with their Agri expenditure.

Indonesia
Indonesia should be set to kick-off and enter market anytime soon. However, according to sources, main concern persists with the crop damage.
The topic this time relates to the earlier estimate damage of 30-40% could transcend by 50%.
Muntok White supplier are seen hesitant this week with a very thin material available on hand.

Brazil
Brazil market is relatively dull entire week 22 with the commotion that affected price trend to increase of about $400-500/ton. Despite the marked up, very few to no active sellers were seen in the market nowadays. Same as Vietnam, Brazil’s footing in market is quite strong refusing to waver at any sign of pressure. Overall, Brazil economy accelerated by 1.2% in first quarter despite uncertainty surrounding pandemic with Brazil Real up by 5.15 per dollar, on track to close at its strongest this year.

Conclusion:
Market has shown all clear signs of bullish dominancy going forward. Best is to be on a side of market momentum seeing how intact it is nowadays. It is always best to take coverage early on rather than be on waiting and lose more after in a hope to outguess or outwit the market.

 

Royal Golden Weekly Pepper Market Updates

FREIGHT RATES FIRM & UP

 

INTERNATIONAL FREIGHT RATES

 

Currently, it continues to increase and it is difficult to get bookings for routes to the US / EU. Freight are forecasted to continue to move sideways or increase in the last 6 months of the year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VIETNAM PEPPER & SPICES MARKET UPDATE 7TH JUNE 2021 – WEEK 23

 

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PEPPER;

 

The international pepper market last week recorded a positive outlook, all domestic markets reported a stable and upward flow.

 

In particular, pepper prices in India have maintained their upward momentum in the past three weeks. In Indonesia, both black and white pepper products are stable despite less volume available on the market. Brazil last week also increased prices and very less raw material was offered. Currently, prices of Brazil and Indonesia continue to be higher than Vietnam in the range of $300 - $350 per metric ton.

 

Vietnam's pepper market last week had many mixed responses due to the decrease in buying demand of exporters. However, at the end of the week, prices continued to increase slightly due to China buying, so prices remained basically unchanged throughout the week.

 

The opening price at the beginning of the week 23^rd kept an increase and very few offered on the market. The main reason is due to good demand coming from China / USA / EU / ASIA… especially China being more aggressive to cover raw material from the past week. In addition, after a very long time banner pepper from Vietnam that the Nepal government gave a quota to importer. The demand suddenly increased in Nepal last week for pepper so this market will be efficient again soon.

 

 

Through the survey crop situation, we see that the remaining amount of pepper in farmer's hands is not much now. During the past 2 weeks, the quantity of materials offered for sale is quite small. Currently, farmers' inventories are mainly concentrated in households with good financial conditions and there is almost no pressure to sell if the market comes down.

 

The continuous increase in coffee prices over the past time has stimulated farmer / collectors to stock up on pepper when the new crop 2022 is still next 7 months while inventories have decreased sharply in the first 5 months of 2021 (exported around 121.000 metric tons already)

 

Currently, pepper prices in Vietnam are still the most attractive, so the demand for the whole market continues to increase. The USA / ASIA / EU for Q3 & 4 production orders will continue to increase in June & July is foreseen.

 

The epidemic Covid-19 control situation in Vietnam's major cities has gradually improved. However, the circulation of raw material such as production materials / production / domestic transportation of many factories is also affected. This will also be a possible cause for the situation that goods will have periods of disruption in domestic supply.

 

Exporting companies and domestic agents mostly have inventory, but it is sold out in big quantities already for forward shipment. We still forecasted that it will not be enough for the demand from now until the end of the year. Therefore, the market trend is still stable and is likely to increase in the near future.

 

We would like to send you the price of pepper from January 1^st , 2021 to May 31^st , 2021 as follows for your reference.

 

 

 

Other information about international freight rates;

 

Currently, it continues to increase and it is difficult to get bookings for routes to the US / EU. Freight are forecasted to continue to move sideways or increase in the last 6 months of the year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I would like to give you an indication price  CASSIA  based on NET FOB HCM as follows:
https://offers-peppertrade.blogspot.com/2021/06/vietnam-cassia-prices-june-7-2021.html

CLOVES MARKET REPORT MAY 31, 2021

 

JUST GOT THE REPORT BELOW PRODUCED BY ROYAL GOLDEN CO
FOUND IT VERY SERIOUS AND USEFULL THEREFORE WE ARE POSTING IT FOR YOUR INFORMATION

Author: Parsram Dhirani

A few months ago, we have heard vague news of lower output of Indonesian cloves which have now turned into a reality.
It resulted a spike in prices by 20-30% in a span of 2 weeks.

Indonesia experiencing one of the bad crop seasons due to excessive rains for the last several months (up until now).
Small islands are reporting crop size as low as 25%, while the arrival at big island is negligibleand several news of 50-60% crop damaged at big and major cloves producing islands.

Jawa Island normally has its crops in May - July, however, this year, there has been no report of new cloves in the producing regions. Even though cloves from Jawa are mainly for the consumption of cigarette companies, bad output from Jawa adds more pressure to the cigarette companies to buy whatever cloves are available in the market, including the Lal Pari cloves which are usually for export.

Realizing this dreadful fact of lower output, large and medium kretek companies introduced a high opening prices to procure material as much as possible.
However, traders and farmers who are very aware of the situation declined to supply at their asking levels.
This made factories increase their prices more.
Many farmers and holders prefer to hold for better prices in coming time.

India which is the second biggest consumer of cloves is facing extreme difficulty in finding replacement at lower levels.
Hence, prices at spot market are rising on daily basis.
Three to five months more of supply vacuum at destination markets such as India and elsewhere may result more hike in spot prices.

Crop of 3000-4000 tons from Comoros Island shall start in the month of July.
According to sources, Chinese who sold their excess stock from China to
Indonesia and Singapore are now very active in Comoros market to procure as
much as possible in the beginning of the season.

Zanzibar produces 4000 tons, and we may see similar number this year as well
in July. We do not have more information except some issues on quality of
cloves last year and those disputes remain unresolved .

A very small remaining quantity of Brazil cloves is being offered in the range of
8500-9000. Their new crop shall start in November/December.

Sri Lanka is at end of their crop and has quickly adjusted their prices with the
international levels.

Madagascar may bring some relief in supply (not necessarily in prices) when
they harvest their new crop in the month of September/October. At this stage,
crop is expected to be decent.

Observation & Analysis

*There is no major source of supply of cloves till Sept/Oct.

*Spot prices at destination markets or centers may rise further till lower prices cargo arrives.

*Other less consuming markets seem to be very active as well.

*Speculative activity is also pushing prices to some extent.

*However, this time, it is more of an economic theory of supply and demand that is playing its
role to bring prices at equilibrium levels.

*In 2011, due to lower production in Indonesia, market touched historically high and Indonesia bought cloves from many parts of the world.
2021 crop is substantially and sharply down as well.

Can 2011 situation repeat itself in 2021?

VIETNAM PEPPER & SPICES MARKET UPDATE 31ST MAY 2021 – WEEK 22

 

SPICES MARKET UPDATE

 

Pepper price today (May 31^st) fluctuates between 72,000 - 72,500 VND/kg. In the past 6 days, the pepper market fluctuated sharply, increasing from 5,000 VND/kg to 6,500 VND/kg in localities. With the increase of many times reaching 10% within just 3 days from early last week. However, at the end of week 21, pepper price increased by 7% and in whole this month May also increased by 4.5%.

 

Prices increased rapidly in the past week, many manufacturers and exporters surprising because the market still has difficulties and inadequacies such as; cash liquidity situation, freight are constantly increasing and it is difficult to get bookings especially to the USA, the epidemic situation is still complicated. However, the price of coffee and other agricultural products had an impressive increase in May, which stimulated farmers to sell coffee and increase pepper stockpiles. In addition, liquidity has gradually improved in the second half of May along with a sudden increase in buying from China.

 

Pepper prices this week in key provinces were significantly adjusted in an upward trend.

 

 

 

 

Although the increases are not as strong as 40-50% as in Feb / March, this price increase is considered sustainable, mainly due to export demand and purchase demand from many different countries such as the USA / CHINA / EU / ASIA... when the assessed inventory has decreased sharply over time. Almost have to continuing cover for Thirds and Fourth quarter shipment.

 

In May, it is forecasted that the number of pepper exports will reach 28,000 tons, bringing the total number of exports in the first 5 months of the year to 121,000 tons. The export volume decreased by 16% compared to 2020, but increase in the average export price, the export value still increased by 25%, reaching 387 million USD.

 

Malaysia; Although it is time to harvest the main crop, the serious disease situation has made it almost impossible for farmers to harvest and sell in the market. The main crop was thus severely affected and damage.

 

India; India will be reopening again during early next month June that make more demand coming in domestic market. After sometime interrupted due to Pandemic, almost try to ensure that purchasing and process. However, the processing are having difficulty for the domestic demand from Masala's manufacturers, when raw materials are not available. The difficulty in supply is pushing Indian pepper prices upward.

 

Brazil; Similar to Vietnam, Brazil's pepper price had a strong increase in the past week with an increase of over 10% from $ 3,600 FOB and currently at $ 3,950 - $ 4,000 FOB. Currently, Brazil's inventory is relatively low and production is forecasted to decrease sharply in 2021, besides the density of pepper will be difficult to reach as the BASTA standard as before. According to the information we received, Brazil is likely to face a severe drought from June to September and is forecast to be the worst drought in 91 years. This will definitely affect the output of pepper / coffee crop in 2021/2022.

 

https://www.reuters.com/business/environment/brazil-drought-alert-country-faces-worst-dry-spell-91-years-2021-05-28/

 

Indonesia; This year is forecasted to harvest in July & August, but according to many information, output will decrease by over 20% compared to the 2020 crop due to unattractive prices that have caused many farmers to switch crops and take less care of the pepper plantation.

 

Other information;

 

The epidemic situation is quite complicated in Vietnam today with a higher infection. A few cities in Vietnam have been locked down, major cities have officially implemented social distancing within 2 weeks. This can also affect the ability to transport and circulation of materials in the market.

 

Please note, in 2020, when Vietnam implemented social distancing, pepper prices had an impressive increase of over 50% in just 2 months. The situation in 2021 also has different changes, but the price trend maybe continue very stable next time.

 

We would like to send you a graph of the average pepper price from June to December in the last 10 years for your reference.

 

 

CASSIA/ STAR ANISE/ TURMERIC / GINGER;

 

The price of cinnamon has continuously increased rapidly due to great demand from EU / USA and ASIA countries. Especially great demand with cinnamon split / cinnamon cigarette / cinnamon broken cleaned…

Anise prices remain stable but the trend is forecast to increase due to strong demand from EU / USA and especially from China...

 

 

 

I would like to give you an indication price PEPPER / CASSIA / STAR ANISE / TURMERIC… based on NET FOB HCM as follows

https://offers-peppertrade.blogspot.com/2021/05/i-would-like-to-give-you-indication_31.html

VIETNAM PEPPER & SPICES MARKET UPDATE 24th MAY 2021 – WEEK 21

 

PEPPER

 

According to the Custom's data, in the first half of May 2021 Vietnam has exported 12,538 tons of pepper, with a turnover of 42.75 million USD, bringing pepper exports in the first 4.5 months of 2021 to reach 105,940 tons with a turnover of 326.54 million USD, down 19.21% in volume but up 17.82% in value over the same period last year. The average export price of pepper in the first half May reached 3,410 USD/ton, up 4.44% compared to the average export price in April 2021.

 

The pepper market has been moving sideways for the past 2 weeks but suddenly increased to 200 USD/MT, equivalent to a 7% increase in just 2 days. Currently, the price of raw materials is being offered at 70,500 VND – 71,000 VND, but the quantity offered is small from farmers and domestic collectors.

 

The main reason is that China is actively buying, in addition the pepper price is still attractive which has reactivated many speculators to increase hoarding despite the domestic market being slow in cash liquidity and the taking of containers still continue to be difficult for destination ports such as the EU and the US and North America.

The US and Europe have also gradually returned to normal. Besides the Middle East, China has also been working after a long holiday which has also boosted demand for pepper raw material increase rapidly.

 

 

CASSIA/ STAR ANISE/ TURMERIC;

 

Cassia raw material continuing up especially cassia broken when huge demand from EU  /  ASIA.

 I would like to give you an indication price PEPPER / CASSIA / STAR ANISE / TURMERIC… based on NET FOB HCM as follows

https://offers-peppertrade.blogspot.com/2021/05/i-would-like-to-give-you-indication.html

 

 

 

VIETNAM PEPPER & SPICES MARKET UPDATE 17th MAY 2021 – WEEK 20

 

 

PEPPER;

 

Market open today with steady/firm and almost unchanged from whole last week.

 

 

VIETNAM PEPPER EXPORTS IN FIRST 4 MONTHS

According to a data report of the Vietnam Customs, pepper exports in April 2021 reached 32,232 tons, an increase of 819 tons or 2.61% compared with the previous month. Decrease of 3,713 tons or 10.33% over the same period last year 2020.

The export turnover in April reached 105.22 million USD, up 12.52 million USD, or 13.51% over the previous month and 32.88 million USD, up 45.47% over the same period last year 2020.

 

The total quantity exported in the first 4 months of 2021 reached 93,557 tons, less 22,794 tons, or 19.59% less compared to the export volume of the first 4 months of 2020.

Export turnover in the first 4 months of 2021 reached 284.30 million USD, up 35.96 million USD, or 14.48 % over the same period.

 

The average export price of pepper in April 2021 at USD 3,265/ton, up 10.64 % compared to the average export price of March 2021.

 

 

IMPORT COUNTRIES IN FIRST 4 MONTHS

 

 

 

VIETNAM PEPPER IMPORTS IN FIRST 4 MONTHS

 

Regarding VPA data, in the first 4 months of 2021, Vietnam imported 11,341 tons, of which black pepper reached 7,749 tons, white pepper reached 3,592 tons. Compared to the same period in the first four months of 2020, the import volume increased by 4.7%. Indonesia – 4,842 tons, Brazil – 3,971 tons and Cambodia – 1,381 tons are the 3 largest pepper exporting countries to Vietnam. Compared to the same period in 2020, imports from Indonesia increased by 31.7%, from Cambodia increased by 22.1%, but imports from Brazil decreased by 22%. This quantity is likely already committed from last year. Next time import quantity will be reduced due to the price in Vietnam now being most competitive. 

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I would like to give you an indication price PEPPER / CASSIA / STAR ANISE / TURMERIC… based on NET FOB HCM as follows;

 https://offers-peppertrade.blogspot.com/2021/05/vietnam-price-indication-for-pepper_17.html